Loan Origination Activities · 27% of the SAFE exammedium
Correct answer: Approval subject to conditions: satisfactory property appraisal, final underwriting, and applicable rate lock
A compliant pre-approval letter is CONDITIONAL. It should state the borrower has been pre-approved based on verified credit and income, subject to: (1) satisfactory appraisal of the subject property, (2) final underwriting review, (3) rate lock at the time of contract, and (4) no material changes in the borrower's financial situation. It CANNOT guarantee approval — property issues, title defects, or changed circumstances may prevent closing. Issuing an unconditional guarantee exposes the lender to liability if the loan doesn't close.
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